The greenback was pounded again Friday as traders pushed it close to its all-time low against the euro, the common currency of the European Union. Over the last 15 months, the dollar has lost about 27 percent of its value against its European counterpart, while taking similar, but smaller falls against other major currencies.

That makes U.S. goods and services cheaper for foreign buyers, but raises costs of German cars and Paris hotels for Americans.

Overall, experts say, the dollar's fall is probably a plus for the U.S. economy, making American companies more competitive in the global marketplace. But there is a chance the greenback's long slide could turn into a rout with devastating effects on U.S. financial markets as foreign investors withdraw their money.

chief economist at the forecasting firm Global Insight. "But the potential is there for a hard landing."

On Friday, the euro rose to $1.1837 from $1.1693 the day before, according to Bloomberg News. That put it less than a penny from its record high of $1. 1899, reached a few days after the euro's debut at the beginning of 1999.

The dollar ended last week at $1.1592. Then, at an economic summit in Europe last weekend, Treasury Secretary John Snow made comments that sounded as if he were giving his blessing to a weaker dollar. Traders took that as a signal to unload dollars.

"We were seeing large flows back and forth," said Bryan Smith, head currency trader at San Francisco's Barclays Global Investors, one of the world's largest money management firms. "Everybody was sort of, 'Wow! We've moved pretty hard and pretty fast.' "

Experts say a tumble for the dollar was inevitable and probably healthy.

The appetite of American consumers for foreign goods is nearly insatiable. The United States sends a torrent of dollars overseas to pay for this shopping habit.

Last year, the U.S. current account deficit with the rest of the world -- the broadest measure of trade and other transfer payments -- ballooned to more than $500 billion, a record level that represents roughly 5 percent of the nation's total output of goods and services. That's the equivalent of a household spending far more than it earns.

One of the few ways to bring that trade gap down is to pare the value of the dollar. The Bush administration has embraced just such a strategy as part of its campaign to boost the economy. That reverses Washington's strong-dollar policy of recent years.

"Snow is out and about devaluing the currency," wrote Nancy Kimelman, chief economist at the Pennsylvania money management firm SEI Investments, in a note to clients.

Trash-talking the dollar might not seem patriotic at first blush. Actually, it is a pointed form of economic nationalism that could benefit American manufacturers and service providers at the expense of foreign rivals.

"You can hear the howls of anguish from industrialists in France and Germany," said Stanford University economist Ronald McKinnon.

Still, there are risks.

"The relatively overt way the Treasury has talked is quite dangerous," said Steven Schoenfeld, chief investment officer at the San Francisco money management firm Active Index Advisors. "This week, you saw a real loss of confidence in the dollar."

The United States has financed its international shopping spree by persuading foreigners to invest hundreds of billions of dollars each year in bonds, stocks and other assets here. Those investors lose money when the dollar falls.

If they believe the dollar will continue to sink, they may slow the flow of funds into the United States. And that could hurt the stock market and drive up interest rates, undercutting the Federal Reserve's cheap-money policy.

Right now, for a different set of reasons, the Fed appears to be winking at the administration's attempts to drive down the dollar.

Fed Chairman Alan Greenspan has said repeatedly that he thinks inflation has fallen too low, weakening corporate profits and confidence. Apparently, he wouldn't mind if more foreign goods became more expensive, pushing prices up a tad.

In addition, most economists believe that a true run on the dollar is highly unlikely. For several reasons, the dollar has a special status that sets a floor on its value.

Much of the world's business is conducted in dollars. Central banks around the world accumulate dollar reserves, the value of which they want to preserve.

Most important of all, because the United States is the world's biggest market, major trading partners such as China and Japan want to keep their products competitive in this country. For that reason, China keeps its currency on par with the greenback, while Japan is likely to step in to the market to buy dollars if the yen climbs too high.

"No country dares to let its currency appreciate (too much) against the dollar," McKinnon said.